FDM half-year results 2026: early recovery signs, but profits slide

FDM Group (Holdings) plc has reported the first six-monthly increase in consultants assigned to clients since its market downturn began in 2023.

That is the headline investors will want to focus on. Unfortunately, it comes alongside another sharp fall in revenue, profit and shareholder distributions.

The technology and business talent specialist ended June with 2,042 consultants assigned to clients. That was 2% above the 2,003 recorded at the end of 2025, although still 6% below the prior-year figure.

Management described the improvement as modest and warned that it remains too early to know whether it will continue. The full figures are available in the original company announcement.

FDM's key first-half figures

Metric	H1 2026	H1 2025	Change
Revenue	£78.6 million	£97.3 million	-19%
Adjusted operating profit	£5.6 million	£9.1 million	-38%
Profit before tax	£4.1 million	£8.0 million	-49%
Adjusted profit before tax	£5.5 million	£9.0 million	-39%
Basic earnings per share	2.8p	5.7p	-51%
Cash generated from operations	£4.4 million	£12.6 million	-65%
Period-end cash	£31.1 million	£34.6 million	-10%
Interim dividend per share	3.0p	6.0p	-50%

Adjusted profit excludes £0.4 million of share plan expenses and £0.9 million of exceptional costs associated with aligning staffing and undeployed consultant numbers to demand.

The results were in line with the Board's expectations, but the year-on-year financial comparisons remain weak. Revenue fell 19%, while adjusted operating profit declined by 38% as fixed costs represented a larger share of the reduced revenue base.

FDM's adjusted operating margin consequently fell from 9.4% to 7.1%.

The first sign that demand may be stabilising

FDM's business depends heavily on the number of consultants placed with clients. The move from 2,003 assigned consultants at the end of 2025 to 2,042 at week 26 of 2026 is therefore encouraging, even if the increase is small.

Consultant utilisation also improved to 93.6% from 91.6%. This measures the cost of deployed consultants as a percentage of the total consultant payroll cost, providing an indication of how effectively FDM is matching available people with client work.

The company cautiously increased recruitment in response to client demand. Coaching completions reached 609, compared with 404 during the second half of 2025 and 424 during the first half of that year.

This creates a delicate balancing act. FDM needs enough trained consultants to capture an improvement in demand, but recruiting too quickly could leave more people on the bench and increase costs.

The group also won 27 new clients, up from 21, with 16 operating outside financial services. That diversification is useful because it reduces reliance on a single industry, although the announcement does not disclose the expected revenue contribution from these new relationships.

North America is providing the clearest momentum

Regional performance was mixed.

Region	H1 revenue	Year-on-year change	Consultants assigned	Change from H1 2025
UK	£40.3 million	-13%	839	-17%
North America	£20.1 million	-25%	593	+33%
EMEA	£3.8 million	-60%	119	-47%
APAC	£14.4 million	Broadly flat	491	Broadly flat

North America stands out because assigned consultant numbers increased by 33% year on year and by 19% from the end of 2025. Coaching completions rose to 282 from 114, while eight new clients were secured compared with one last year.

Revenue was nevertheless 25% lower year on year. FDM explained that average deployed numbers remained lower because the improvement took place over the course of the half. Revenue did increase by 6% compared with the second half of 2025, offering a more encouraging indication of recent direction.

The UK remained challenging, with revenue down 13% and deployed consultant numbers down 17%. EMEA was the weakest region following the conclusion of a German client project in 2025, while APAC delivered broadly stable revenue and consultant numbers.

Both EMEA and APAC recorded adjusted operating losses, of £0.2 million and £0.1 million respectively.

Cash remains a source of resilience

FDM ended June with £31.1 million of cash and no debt. That provides valuable protection while client spending decisions remain slow and uncertain.

Cash generated from operations fell to £4.4 million from £12.6 million, but reported cash conversion remained above 100% at 104%. Cash conversion compares operating cash generation with operating profit, while adjusted cash conversion was 94% after accounting for the non-cash share plan expense.

The cash balance was below the £35.3 million held at the end of 2025. During the half, FDM paid £4.4 million in dividends, alongside lease payments, tax and modest capital expenditure.

The Board cut the interim dividend from 6.0p to 3.0p per share. It will be paid on 13 November 2026 to shareholders on the register on 23 October 2026.

The lower payment reflects the pressure on earnings. It also preserves more financial flexibility while the strength and durability of any recovery remain uncertain.

AI presents an opportunity and a strategic risk

FDM is adapting its training and services as artificial intelligence changes client requirements. Its AI and Sales Transformation Programmes are intended to develop AI-focused products, update sales methods and increase the internal use of the technology.

The group has also established a Product Centre of Excellence, where undeployed consultants use AI technology on internal initiatives, client projects and proofs of concept.

This could make consultants more relevant to clients and turn some bench time into useful skills development. However, FDM also acknowledges the risk that rapid technological change could alter demand or make parts of its existing offering less attractive.

There are no disclosed financial targets for the AI programmes, so their commercial contribution cannot yet be measured from this announcement.

What investors should watch next

The most important question is whether consultant deployments continue to rise during the second half. North America's progress is promising, but it needs to translate into higher group revenue and improved margins.

Investors should also watch the UK, where consultant numbers remain materially below the prior year, and EMEA, where revenue fell by 60%.

The debt-free balance sheet and £31.1 million cash position give FDM time to manage the downturn. Better utilisation, increased coaching completions and more new clients offer early evidence that conditions may be stabilising.

Still, profits and earnings remain under considerable pressure, while the dividend has been halved. No numerical full-year guidance was disclosed, and management explicitly said it was too early to judge whether the recent improvement would continue.

For now, this looks like an early operational turn rather than a completed financial recovery.